Buying a Used Luxury Car: Should You Consider It?
If you're looking for a used car, you may be tempted by vehicles from BMW, Lexus, Mercedes, Audi and other luxury brands that are often available at a fraction of their original value. It seems perfect: You don't spend a lot of money on a car, but you get all the luxury -- and status -- of a high-end vehicle. But is this really a good idea? We've listed a few reasons why you may want to reconsider buying an older luxury car.
Maintenance and Repairs
It's true that an aging luxury vehicle probably won't lose much money in depreciation, since the original owners tend to experience much of the car's value loss. But you may wind up losing just as much thanks to maintenance and repairs, which can be very expensive for a used luxury car that's past its warranty expiration date.
Normally, we'd tell you to get a mechanical inspection before buying, but that may not do the trick. Own a used luxury car for a long enough time and you'll likely find that many expensive parts will eventually start to wear and break -- even if they were fine when you signed the papers. For this reason, we wouldn't completely recommend against buying a used luxury vehicle, but we'd strongly suggest you factor maintenance and repairs into your budget.
Do you want the latest gadgets? If so, a used luxury vehicle probably isn't the right car for you. After all, many of today's economy cars, such as the Ford Focus and Chevrolet Sonic, tend to have more features than most luxury vehicles, even if those luxury vehicles are just five or six years old. And if you buy a used luxury car and find that you can't live without your gadgets -- think iPod hookup, MP3 player or an up-to-date navigation system -- it can be costly to install them.
If you're considering a vehicle for, say, $20,000, you might find any number of enticing pre-owned luxury options from brands such as Cadillac, BMW or Mercedes. But remember that just about any new car available for $20,000 will be a lot more fuel-efficient than nearly any used luxury car at that price.
Our suggestion is simple: Be sure you account for gas mileage when you're deciding how much money you can spend on your next car. While a $20,000 used Mercedes and a $20,000 new Ford Focus may seem like they cost the same on paper, you'll quickly find that isn't true whenever you visit the pump.
If you're thinking about financing your next car, you'll have to remember that getting a loan can be difficult if the car you want is more than a few years old. Some banks won't finance vehicles over four or five years old, while others restrict their financing terms based on mileage. Either way, if a used luxury vehicle is your car of choice, be sure to call your bank and ask whether they'll finance it before you make the purchase.
In the end, we don't suggest that shoppers stay away from used luxury cars entirely -- especially since we know just how tempting high-end vehicles can be. But we strongly suggest budgeting for gas mileage and repairs, and understanding potential issues such as financing and a lack of gadgets. That way, you can decide early on whether a used luxury car is really for you -- something that will make your car search just a little easier.